Borden v. Division of Medical Quality

30 Cal. App. 4th 874, 35 Cal. Rptr. 2d 905, 94 Daily Journal DAR 17069, 94 Cal. Daily Op. Serv. 9270, 1994 Cal. App. LEXIS 1239

• Court: California Court of Appeal
• Decided: December 2, 1994
• Docket: D018801
• Status: Published

Opinions

Opinion

HUFFMAN, J.

Larry Igor Borden, M.D., filed a petition for writ of administrative mandate (Code Civ. Proc., § 1094.5) to review a decision of the Division of Medical Quality (the Division) of the Medical Board of California (the Board) revoking Borden’s license to practice medicine. The trial court granted the petition in part on the basis that 1990 amendments to Business and Professions Code¹ section 2229 cannot be applied retroactively. The Board appeals. We reverse with directions to enter a new judgment denying the petition.

Facts

On February 9, 1987, the Board filed an accusation alleging that Borden, an anesthesiologist, committed acts of gross negligence, repeated negligent acts and acts of incompetence (§ 2234, subds. (b), (c) & (d)), and practiced medicine while intoxicated (§ 2240) in his treatment of Keona Murphy, a six-week-old girl who died following surgery in 1984. In a supplemental accusation filed August 31, 1990, the Board added allegations that Borden committed the same violations except for practicing while intoxicated in his treatment of Harold Nordquist, a 68-year-old man who died following surgery in 1989.

The case was tried before an administrative law judge in a 10-day hearing in April and May 1991. On June 10, 1991, the administrative law judge issued his proposed decision, finding cause for disciplinary action existed against Borden with respect to patient Nordquist, but not with respect to patient Murphy. The proposed order of the administrative law judge revoked Borden’s license, but stayed the revocation and placed Borden’s license on probation for a period of 10 years under various terms and conditions.²

The Division rejected the administrative law judge’s proposed decision and decided the case itself on the record, including the transcript of the hearing. On February 11, 1992, the Division issued its decision, finding cause for disciplinary action existed against Borden with respect to patient Murphy (§ 2234, subds. (b) & (d)), as well as patient Nordquist (§ 2234, subds. (b), (c) & (d)). The Division ordered the same discipline as had been proposed by the administrative law judge.

The Board filed a petition for reconsideration, and on July 8, 1992, the Division issued its “Decision After Reconsideration,” which adopted the prior decision with two changes. The first change was the addition of the following paragraph:

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“The penalty imposed by the Division in the prior decision is not consistent with the recent legislative mandate raising protection of the public above all other concerns, including rehabilitation of the licensee. The probationary penalty previously ordered does not adequately protect the public from respondent’s deficiencies. Two patients who would otherwise be alive today are dead because of respondent’s gross negligence and incompetence. Only an outright revocation of respondent’s license will adequately protect the public.”

The second change was to strike the penalty provisions of the prior decision and enter a new order, namely revocation of Borden’s license, effective August 7, 1992.³

On August 5, 1992, Borden filed a petition for writ of administrative mandate. On September 3, 1992, the trial court granted Borden’s application for a stay of the Board’s revocation of his license, but placed certain restrictions on his practice of medicine.⁴

On February 23, 1993, the trial court denied the writ in part, finding the evidence taken at the administrative hearing supported the determinations that cause for discipline existed with respect to Borden’s treatment of both patients. However, the trial court also issued an alternative writ of administrative mandate, directing the Board to reconsider the penalty to be imposed on Borden. The trial court found the penalty of revocation in the “Decision After Reconsideration” dated July 8, 1992, “was the consequence of the improper retroactive application” of a 1990 amendment to section 2229. The trial court also ordered its September 3, 1992 order, which stayed Borden’s license revocation while imposing restrictions on his practice of medicine, to be in full force and effect until such time as the Division issued a new decision in compliance with the alternative writ. The Board timely appealed.⁵

Discussion

Prior to January 1, 1991, section 2229 provided: “In exercising its disciplinary authority [the Division] or a medical quality review committee or panel thereof shall, wherever possible, take such action as is calculated to aid in the rehabilitation of the licensee, or where, due to lack of continuing education or other reasons, restriction on scope of practice is indicated, to order such restrictions as are indicated by the evidence. It is the intent of the Legislature that the division and committees shall seek out those licensees who have demonstrated deficiencies in competency and then take such actions as are indicated, with priority given to those measures, including further education, restrictions from practice or other means that will remove such deficiencies.” (Stats. 1980, ch. 1313, § 2, p. 4473.) In 1990, effective January 1, 1991, the Legislature amended section 2229 to read as follows:

“(a) Protection of the public shall be the highest priority for [the Division], a medical quality review committee, the California Board of Podiatric Medicine, and administrative law judges in exercising its disciplinary authority.

“(b) In exercising its disciplinary authority [the Division], Board of Podiatric Medicine, a medical quality review committee or panel thereof, or an administrative law judge, shall, wherever possible, take action as is calculated to aid in the rehabilitation of the licensee, or where, due to lack of continuing education or other reasons, restriction on scope of practice is indicated, to order restrictions as are indicated by the evidence.

“(c) It is the intent of the Legislature that the division, the enforcement program, and committees shall seek out those licensees who have demonstrated deficiencies in competency and then take those actions as are indicated, with priority given to those measures, including further education, restrictions from practice or other means[,] that will remove those deficiencies. Where rehabilitation and protection are inconsistent, protection shall be paramount.” (Stats. 1990, ch. 1597, § 14, italics added.)⁶

The interpretation of these statutory provisions is a question of law. (California Teachers Assn. v. San Diego Community College Dist. (1981) 28 Cal.3d 692, 699 [170 Cal.Rptr. 817, 621 P.2d 856].) “ ‘When the facts do not conflict and the issues involve proper application of a statute or administrative regulation, a reviewing court is not bound by the trial court’s determination. [Citation.]’ [Citation.]” {Webb v. Miller (1986) 187 Cal.App.3d 619, 625 [232 Cal.Rptr. 50].)

I

Retroactivity Rules

Here, on reconsideration, the Board decided that under the recent amendments to section 2229, the proper discipline to be imposed was revocation of Borden’s license. The trial court ruled that this penalty was the consequence of an improper retroactive application of the amendments. “A statute is retroactive if it substantially changes the legal effect of past events. [Citations.] A statute does not operate retroactively merely because some of the facts or conditions upon which its application depends came into existence prior to its enactment. [Citations.]” (Kizer v. Hanna (1989) 48 Cal.3d 1, 7-8 [255 Cal.Rptr. 412, 767 P.2d 679].) The rule is also stated: “A retroactive statute is one which ‘ “affects rights, obligations, acts, transactions and conditions which are performed or exist prior to the adoption of the statute.” ’ [Citation.]” (Russell v. Superior Court (1986) 185 Cal.App.3d 810, 814 [230 Cal.Rptr. 102], quoting Aetna Cas. & Surety Co. v. Ind. Acc. Com. (1947) 30 Cal.2d 388, 391 [182 P.2d 159].) The theory against retroactive application of a statute is that the parties affected have no notice of the new law affecting past conduct. (Russell v. Superior Court, supra, 185 Cal.App.3d at p. 814.)

It is noted that these amendments were effective January 1, 1991, before Borden’s hearing commenced, but after the events which gave rise to the hearing (the 1984 and 1989 deaths of patients). In deciding whether a statute may be given retroactive application, it is not significant whether the statute is labeled substantive or procedural in nature. “Both types of statutes may affect past transactions and be governed by the presumption against retroactivity. The only exception which we can discern from the cases is a subcategory of procedural statutes which can have no effect on substantive rights or liabilities, but which affect only modes of procedure to be followed in future proceedings.” (Russell v. Superior Court, supra, 185 Cal.App.3d at p. 816.) Such modes of procedure will impact only on future events, such as trial procedure or rules of evidence in fiiture trials. (Ibid.) “If substantial changes are made, even in a statute which might ordinarily be classified as procedural, the operation on existing rights would be retroactive because the legal effects of past events would be changed, and the statute will be construed to operate only in futuro unless the legislative intent to the contrary clearly appears. [Citations.]” (Aetna Cas. & Surety Co. v. Ind. Acc. Com., supra, 30 Cal.2d at p. 394; see In re Cindy B. (1987) 192 Cal.App.3d 771, 778-779 [237 Cal.Rptr. 677].)

II

Contentions on Appeal

Based on these rules, our inquiry should be whether the amendments to section 2229 changed the legal effects of past events, and constitute “substantial changes” in the law applicable to Borden’s case. (Aetna Cas. & Surety Co. v. Ind. Acc. Com., supra, 30 Cal.2d at p. 394.) Borden has suggested several ways in which the change in law could have affected his conduct. Because he has always denied that his treatment of the two patients was grossly negligent, he does not apparently contend that he conducted his medical practice in reliance on the former version of section 2229, and its emphasis on rehabilitation of the physician. His arguments, instead, are directed toward the time of the hearing, as he contends the new version of section 2229 was not introduced until the end of the proceedings, and thus constituted surprise and a due process deprivation due to lack of notice that the new statute would be applied to his case. He also suggests that had he known the new law would be brought into his hearing, he might have entered into a plea bargain of some kind with that new law in mind. He thus contends these amendments constituted a substantive change in the prior law, as the bill of which they were a part, the Medical Judicial Procedure Improvement Act (Stats. 1990, ch. 1597, §§ 1, 39) constituted an extensive overhaul and restructuring of the medical disciplinary system. In particular, he points to section 1 of the bill, an uncodified statement of legislative intent, providing as follows:

“The 1989-90 Regular Session of the Legislature declares that the physician discipline system administered by the board’s Division of Medical Quality is inadequate to protect the health, safety, and welfare of the people of California against incompetent or impaired physicians.

“It is, therefore, the intent of the Legislature to restructure the physician discipline system of the Medical Board of California in order to give it authority to act quickly in extreme cases to impose interim protective measures or final sanctions short of license revocation or suspension; more information from a variety of enhanced reporting sources and increased public outreach; procedures which afford a fair review and hearing by an experienced administrative law judge without excessive delay; procedures to ensure a high quality hearing; and enhanced resources to finance such a system in the interests of protecting the people of California. It is therefore the intent of the Legislature to improve the discipline system of licensed physicians and allied health professionals by creating a more expeditious and efficient adjudicatory system and providing it the adequate resources for its performance. It is also the intent of the Legislature that the pay scales for investigators of the Medical Board of California be equivalent to the pay scales for special investigative agents of the Department of Justice, in order to attract and retain experienced investigators.” (Stats. 1990, ch. 1597, § 1.)

Borden also argues that the mere fact that the Board reconsidered the penalty to be imposed in his case, based on the amendments, shows that a substantive change in the law took place.

III

Exception to Retroactivity: Clarification of the Law

To evaluate these arguments, we must analyze the extent to which the amendments to section 2229 actually changed existing law. There is a well-established exception to the general rule that statutes are not construed to apply retroactively, i.e., when the legislation merely clarifies existing law. (Bowen v. Board of Retirement (1986) 42 Cal.3d 572, 575, fn. 3 [229 Cal.Rptr. 814, 724 P.2d 500]; Balen v. Peralta Junior College Dist. (1974) 11 Cal.3d 821, 828-829, fn. 8 [114 Cal.Rptr. 589, 523 P.2d 629].)

We first take note that there is no express declaration in the legislation as to whether the Legislature intended the amendments to operate retroactively. In the absence of such an express declaration of legislative intent for retroactive application, a court may look to a variety of other factors to determine such legislative intent, such as the context of the legislation, its objective, the evils sought to be remedied, the history of the times and similar legislation, public policy, and/or contemporaneous statutory construction. (Marriage of Bouquet (1976) 16 Cal.3d 583, 592 [128 Cal.Rptr. 427, 546 P.2d 1371].)⁷ We need not discuss these secondary indicators, however, as we conclude that the amendments to section 2229 are merely a clarification, as opposed to a substantive change, in the medical disciplinary system, based on the historical background of the public policy behind the Medical Practice Act (§ 2000 et seq.), of which section 2229 is a part. To reiterate the changes made by the amendments: They first state a public policy placing public protection at the top of the Board’s priorities in disciplinary matters. They also provide guidance to the Board in exercising its discretion in decisionmaking, by stating: “Where rehabilitation and protection are inconsistent, protection shall be paramount.” (§ 2229, subd. (c).) We find such statements to be a clarification of existing law.

A

Public Protection

Public protection is not a new concept in the Medical Practice Act. In Sobey v. Molony (1940) 40 Cal.App.2d 381, 388 [104 P.2d 868], the Court of Appeal stated that the Legislature showed no intent to “benefit offending doctors at the expense of the general public,” merely through “codification of the law relating to medical practice.” In Furnish v. Board of Medical Examiners (1957) 149 Cal.App.2d 326, 331 [308 P.2d 924], the court explained that the Legislature established revocation and suspension proceedings for medical licenses in order “to protect the life, health and welfare of the people at large and to set up a plan whereby those who practice medicine will have the qualifications which will prevent, as far as possible, the evils which could result from ignorance or incompetency or a lack of honesty and integrity.” Similarly, in Shea v. Board of Medical Examiners (1978) 81 Cal.App.3d 564, 574 [146 Cal.Rptr. 653], the court stated, “The purpose of the State Medical Practice Act (§ 2000 et seq.) is to assure the high quality of medical practice; in other words, to keep unqualified and undesirable persons and those guilty of unprofessional conduct out of the medical profession. [Citations.]” Certainly, a chief purpose of the Medical Practice Act has always been public protection. (See § 2030, providing that the provisions of the chapter are to be construed as restatements and continuations of the same subject matter as found in previous medical practice acts.)

To the extent that legislative history is illuminating here, we note that in the uncodified statement of legislative intent the Medical Judicial Procedure Improvement Act lists five particular areas in which the physician discipline system was to be restructured: (1) interim protective measures; (2) enhanced reporting souces; (3) fair review and hearing without excessive delay; (4) high quality hearings; and (5) enhanced resources. (Stats. 1990, ch. 1597, § 1.) This act was intended by the Legislature to correct a situation in which the physician discipline system had been found inadequate to protect the health, safety, and welfare of the public against incompetent or impaired physicians, (ibid.) Thus, this public protection purpose remained constant throughout the history of the Medical Practice Act, including the 1990 amendments to section 2229.

B

Board’s Discretion as to Penalty: Balancing Required

We find it most significant that revocation of a license was a penalty available to the Board in its discretion both before and after the amendments were enacted. Section 2227, both historically and in its 1980 version effective through the amendments made in 1990 and thereafter, provided for revocation or suspension of practice or probation or other discipline to be available to the Board after a finding of guilt after a licensee’s administrative hearing. (See also § 2234 [providing grounds for discipline].) Thus, the amendments did not change the penalty to which Borden was subject at any of the relevant times. The amendments do not make a lawful act unlawful or change the penalty for the licensee’s acts in a way that changes the legal effects of past events. (Aetna Cas. & Surety Co. v. Ind. Acc. Com., supra, 30 Cal.2d at p. 394.)⁸ Thus, unlike in In re Cindy B., supra, 192 Cal.App.3d 771, 783, Borden cannot be said to have had no notice that the penalty for the acts of gross negligence might be revocation of his license (as distinguished from the father in Cindy B. who had no notice that removal of his children from his custody could be the result of a dependency adjudication). This statutory amendment did not substantially change the legal effect of past events. (Kizer v. Hanna, supra, 48 Cal.3d at p. 7.)

In any case, because Borden’s hearing was held in March and April of 1991, after the amendments went into effect in January of 1991, he is not justified in complaining that the amendments were a surprise to him because not raised by the Board until somewhat late in the proceedings. Borden was represented by counsel at the hearing and is presumed to have been on notice of the change in the law. (See Hilton v. McNitt (1957) 49 Cal.2d 79, 82 [315 P.2d 1] [parties and their attorneys are presumed to know applicable law concerned]; Willett v. Schmeister Mfg. Co. (1926) 80 Cal.App. 337, 339-340 [251 P. 932] [counsel’s ignorance of a statutory time limitation is not excusable mistake or neglect].)

In any case, as we have shown, public protection has always been a predominant purpose of the medical discipline system, and the portion of the amendment placing public protection above rehabilitation in the Board’s balancing decision gives the Board guidance in how to exercise its discretion. The extent of a penalty within the Board’s discretion is for the Board to determine. (Furnish v. Board of Medical Examiners, supra, 149 Cal.App.2d at p. 332.) As stated, revocation was a penalty within the Board’s discretion throughout these proceedings, both before and after the 1990 amendments. (§ 2227.) This discretion has a very broad scope and is not to be disturbed absent a manifest abuse of discretion. (Yellen v. Board of Medical Quality Assurance (1985) 174 Cal.App.3d 1040, 1060 [220 Cal.Rptr. 426].)

Moreover, rehabilitation remains a possibility under the 1990 amendments, unless it is inconsistent with public protection. Under section 2307, a person whose certificate has been revoked may seek reinstatement after three years have passed after revocation of the license. (§ 2307, subd. (a).) However, at the time of this hearing, the Board had the authority to order a revocation in the first instance, and the fact that it did not do so until the reconsideration stage of the proceedings does not indicate that the amendments substantively changed the law, since the matter of penalty was always within the scope of the Board’s discretion. The Board was statutorily mandated to pursue the same objectives before and after the amendments. Borden failed to pursue his cross-appeal, which challenged the factual basis for the licensing action, and he has offered only speculation as to whether his behavior might have been affected by reliance on prior law, e.g., in not pursuing a plea bargain. (See Evangelatos v. Superior Court (1988) 44 Cal.3d 1188, 1214 [246 Cal.Rptr. 629, 753 P.2d 585] [reasonable reliance on current legal principles will not be defeated absent clear legislative intent to override such reliance].) For this reason, and because the penalty determination was always within the Board’s discretion, and was not changed by the amendments, we find this was not a substantive change in the law for which retroactive application was barred.

Because of our conclusions above, we need not address in detail the Board’s backup arguments that even though these amendments did constitute substantive changes in the disciplinary system, they could still be applied retroactively, even if affecting the doctor’s vested right in his licensing privileges, due to the state’s police power to regulate the medical profession, and due to the conditional nature of licensing status, subject to a lack of cause for discipline. (See In re Marriage of Bouquet, supra, 16 Cal.3d at pp. 592-594.) It is well established, however, that the state may interfere with vested property rights under its police power “whenever reasonably necessary to the protection of the health, safety, morals, and general well being of the people.” (Id. at p. 592; see In re Ford (1988) 44 Cal.3d 810, 816, fn. 6 [244 Cal.Rptr. 476, 749 P.2d 1331].)

Since we have concluded that the penalty of revocation was at all times within the Board’s discretion, and since the matter of penalty is confided to the Board’s discretion, it follows that the trial court erred in granting the petition for writ of mandate to require reconsideration of the penalty under prior law. The proper procedure is for this court to reverse the judgment with directions to the trial court to enter a new judgment denying the petition. (Code Civ. Proc., §§43, 909; Pacific Motor Transport Co. v. State Bd. of Equalization (1972) 28 Cal.App.3d 230, 239 [104 Cal.Rptr. 558].) This disposition makes moot the Board’s motion to clarify the license status of Borden during the pendency of this appeal.

Disposition

The judgment is reversed with directions to the trial court to enter judgment denying the petition and vacating the stay order. Costs on appeal to appellant Division.

Nares, J., concurred.

1 All subsequent statutory references are to the Business and Professions Code unless otherwise specified.

2 Among other things, the terms and conditions included: Borden taking and passing an oral or written examination in anesthesiology and, once the examination was passed, Borden submitting to the Division a plan in which his practice would be monitored by another physician in his field of practice who would make periodic reports to the Division.

3 Contrary to Borden’s contention in his respondent’s brief, it appears that the petition for reconsideration was timely under Government Code section 11521, setting a 30-day time limit for such a petition, in light of the order staying the effective date of the decision in this matter, of which we have taken judicial notice.

4 The stay order placed the following restrictions on Borden’s practice of medicine: “1. [Borden] is prohibited from practicing medicine in a surgical setting; 2. [Borden] is prohibited from administering any type of anesthesia; 3. [Borden] is prohibited from administering any narcotic or analgesic; and 4. [Borden] must secure the co-signature of a physician and surgeon licensed in this state on any and all prescriptions issued by [Borden] for any narcotic or analgesic.”

5 A cross-appeal by Borden was dismissed after he did not timely deposit costs for preparation of the record.

6 In 1993, the Legislature further amended section 2229 (Stats. 1993, ch. 1267, § 24) with nonsubstantive changes that need not concern us.

7 By order of this court on July 15, 1994, we took judicial notice of certain documents relating to the legislative history of Senate Bill No. 2375, which amended section 2229, that were supplied to us by the Board. We subsequently asked the Board to supply us with a complete history of Senate Bill No. 2375. We take judicial notice of the remaining legislative history documents supplied to us.

8 Because physician discipline proceedings are not penal in nature, ex post facto rules do not apply in considering retroactivity questions. (Furnish v. Board of Medical Examiners, supra, 149 Cal.App.2d at pp. 330-331.)